For many individuals in their professional and financial lives, the new year comes with new goals and possibilities. The “Great Resignation” is expected to continue throughout the year as employees leave jobs for new opportunities. Many employees have pledged to save more this year, but many say they don’t know how they will do it.
Whether you’re rolling over your retirement plan to a new employer because of a job change or simply looking for ways to maximize your savings, it is a great time to maximize your retirement savings and save more in 2022.
Review Your Company’s Plan Contributions
The easiest way to improve your financial future is to increase your retirement plan contributions. First, look at what your company’s plan offers, which could include a company match, and adjust your contributions accordingly. For example, suppose you work at a company that provides employees the opportunity to participate in a 401(k)-retirement savings plan. In that case, you’re already two steps ahead. Next, read our blog to learn more about the benefits of matching contributions from your employer .
The new year also brings changes from the IRS – increasing how much you can allocate to your retirement plan. Employees may contribute up to $20,500 in 2022 to a 401(k) or 403(b) plan, which is $1,000 more than the limit in 2021. In addition, if you’re over 50 years old, you can add an extra $6,500 in catch-up contributions. Maximizing your employer match and IRS limits will help grow your savings exponentially faster as time goes on.
For the latest updates on contribution changes, check out our FAQ page.
Increase Your Automatic Contributions
Reviewing your automatic contributions at the start of the year can help you understand and make any necessary changes. If possible, try to increase your contributions by 1%. By contributing just 1% more, you can save thousands over the course of your career for retirement. You can read more about the difference a 1% contribution can make on our blog.
A 1% increase can make a difference in your overall savings when it’s time to retire. You’ll want to review your finances along the way to make sure you’re on track. Use our 401(k) contribution calculator to help you determine exactly how much you should be contributing to your accounts to reach your goals.
If you can’t reach the maximum contribution amount today but want to contribute more, make an effort to meet the company match percentage and gradually increase your contributions from there.
Consider a Target-Date Fund
If you are just starting your retirement journey or want a simple method to get on track with your retirement savings, look at using a target-date fund (TDF). Target-date funds shift assets from stocks to bonds as you approach retirement.
Target-date funds automatically adjust for you and ensure that your risk level is in alignment with where you are at in your retirement savings journey. In addition, they’re an easy way to invest without putting yourself in a position where you want or need more or less risk than intended.
However, if you’re looking for a more individualized managed service account that takes in your unique financial circumstance and goals, check out our Bespoke portfolio service. Similar to a target-date fund, Bespoke is more personalized and creates a clear path to your retirement goals with a customized savings plan built entirely online.
Consolidate Old 401(k) Accounts
While changing jobs, it’s crucial to handle the big financial decisions that come with it so you can continue to maximize your retirement savings efforts. For example, suppose you change jobs this year. In that case, you may wish to roll over your old 401(k) money into an account with your new employer or an individual retirement account (IRA). Just make sure you don’t cash out the funds, or you’ll pay taxes and a penalty, depending on your age. Therefore, it’s essential to evaluate your 401(k) plan options when changing jobs. Here’s what you need to know.
If you have several retirement savings accounts, review your portfolios. Make sure you understand how and where your dollars are invested and that your funds work in your best interest, with a risk level you find acceptable.
If you have an account with Slavic401k, you can review questions related to your contributions, withdrawals, and fees here. If you have an account with another financial institution, contact them directly.
Contact us today if you have questions about setting up an account with Slavic401k through your employer.